By early April, global crude-oil benchmark ICE Brent Crude Futures had closed over $70 per barrel for the first time since November 2018, having already surged by some 30 percent since the beginning of the year. Just a few weeks later, it rallied to $75 per barrel to hit a near six-month high, before modestly retreating. The gains notched up this year have now raised much speculation over whether crude can sustain its rally and hit $100 per barrel in the near future. If so, it would be the first time since 2014 that it reached this milestone.
Production cuts by OPEC+, which includes 10 non-OPEC countries—most notably Russia, Mexico and Kazakhstan—in addition to the organisation’s 14 member countries, are aiming to prevent excess supply in the global market following the dramatic drop in crude prices late last year. As such, the alliance has agreed to slash output by 1.2 million barrels per day (bpd) during the first six months of 2019, before meeting again in June to decide whether to extend the agreement. The plan has been mostly successful to date, with OPEC supply falling by more than 1.5 million bpd this year, which, in turn, has helped drive prices higher. Saudi Arabia has been chiefly responsible for the cuts, having reduced output by a further 324,000 bpd in March.
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Source: International Banker